Around 10 a.m. on the 12th, a PB center in Gangnam that we visited saw a steady stream of investors from the early hour. There were only three consultation counters, but eight customers were already waiting in the seating area for their turn. Most of those waiting were seniors in their 60s and 70s.
When it was her turn, a woman investor in her 70s sat down with a staff member, thrust her smartphone forward and said, "I sold Samsung Electronics, but the investment funds have vanished without a trace," showing signs of distress. When the staffer told her that proceeds from stock sales can be found in cash balances, she relaxed and asked, "I sold Samsung Electronics, so what stock should I buy now?" She said that while she had only signed up for funds recommended by banks until now, this was her first direct stock investment in about 20 years.
She said, "When I go to gatherings, everyone talks about Samsung Electronics and Hynix, so I tried investing with my smartphone and made quite a bit of money," adding, "I thought stocks were risky, but seeing myself make a profit so quickly, it doesn't seem that hard. I regret not doing it sooner."
At another nearby securities branch, seniors were receiving consultations at every counter. A person surnamed Kim, 70, gave a commercial bank account number to a staff member and asked to link it to a stock account. Kim said, "If I max out my bank overdraft line, I think I can buy about 10 shares of SK hynix."
With the stock market surging recently, a considerable number of investors are gathering at securities branches nationwide. As HTS and MTS have become more widespread, many stock investors use computers and smartphones, but many still visit branches in person to ask about opening accounts and placing stock orders. In particular, most who visit branches are seniors 60 and older.
A securities firm employee said that on the day the KOSPI broke through 7,000 points, there were so many customers that there wasn't even time to go for lunch, adding, "I don't know where customers are getting all that money," and, "From little kids to seniors, it seems there's no one not investing in stocks."
The problem is that a significant number of seniors are jumping into the market without fully recognizing the risks of stock investing. After ChosunBiz compiled new account openings at the three major domestic securities firms—Mirae Asset Securities, Korea Investment & Securities Co., and Samsung Securities—it found that from Jan. 1 to mid-May this year, the number of newly opened securities accounts by seniors 60 and older increased by around 10% compared with the same period last year. This shows retirement funds are rapidly flowing into risky assets, riding the market's optimism.
A PB at a major securities firm said, "Seniors who have invested in stocks for a long time have a high level of understanding of stocks as an asset, and they diversify across deposits, bonds, and derivatives such as ELS, not just stocks. The issue is seniors who are entering the stock market for the first time after hearing stories that people around them have made money."
Many of them had parked spare cash only in very safe bank deposits, but as the "bull frenzy" continued, they are often starting to invest in stocks for the first time. Housewife Choi, 66, who said she began stock investing early this year after installing an MTS for the first time, said, "They say if you leave your money only in bank deposits you become a 'beggar senior,' and I saw a YouTube video saying the real estate era is over and the stock era has come, so I'm investing in stocks with my son's help."
In the securities industry, optimistic views on the domestic stock market are emerging, leaving room for further gains in the KOSPI. Buoyed by such outlooks, household funds are flowing en masse into the stock market. The same goes for senior funds that should manage retirement assets with an emphasis on stability over profitability due to the cutoff of regular earned income.
Experts note that if the market corrects contrary to expectations, the impact could be severe for individual investors with limited experience, especially seniors with short stock-investing track records.
A securities firm employee said, "As Korea's asset market has grown, it is natural to turn to investing instead of saving, but stocks are clearly risky assets," adding, "It is important to adhere to the principle of diversification and find an asset allocation ratio that suits you."
The employee added, "When stock prices surge in a short period, investment also shows signs of overheating, so financial institution experts should actively deliver stable investment guidelines to investors."